It is foreshadowing because later Sir Sagramore is shot (chapter 39). You learn a lot from that bullet hole because, of course there were bullets in that time, so you are being told that something strange is going to happen.

While one can look at the obvious in reference to the bullet in the armor, it more subtly foreshadows he demise of that which some deem to be indestructable. Armor is seen as being a way to protect oneself from injury and harm. It is this bullet hole that seems to be out of place and contrary to our perceptions of armor as the "bullet-proof vest" of its time. All that Hank attempts to create to tear down the church and the concept of the Diving Right of kings is eventually overturned or destroyed by his one great enemy - The Catholic Church.

The time period of the Connecticut Yankee is before gunpowder is invented and ready to use so the bullet hole in the armor foreshadows and tells us signs that things were really out of time and we must look forward to the future and not linger at the past, if not there would be no progress or improvement